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2018 Georgia Code 14-3-725 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-3-725 Case Law from Google Scholar Amendments to OCGA 14-3-725

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.

ARTICLE 7 MEETINGS

14-3-725. Voting requirements for election of directors; cumulative voting.

  1. Unless otherwise provided in the articles, directors are elected by a majority of the votes cast by the members entitled to vote in the election at a meeting at which a quorum is present.
  2. If the articles or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two or more candidates.
  3. Cumulative voting is not authorized at a particular meeting unless:
    1. The meeting notice or statement accompanying the notice states that cumulative voting will take place; or
    2. A member gives notice during the meeting and before the vote is taken of the member's intent to cumulate votes, and if one member gives this notice all other members participating in the election are entitled to cumulate their votes without giving further notice.
  4. A director elected by cumulative voting may be removed by the members without cause if the requirements of Code Section 14-3-808 are met, unless the votes cast against removal or not consenting in writing to such removal would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.
  5. Members may not cumulatively vote if the directors and members are identical.

(Code 1981, §14-3-725, enacted by Ga. L. 1991, p. 465, § 1.)

COMMENT

This section is based both on the Model Act and on its Business Code counterpart, section 14-2-728, but differs from each. Under the Model Act, the Business Code and the Revised Model Business Corporation Act, directors are elected by a plurality of the votes cast. This section requires a majority vote. See subsection (a). Thus, for nonprofit corporations that wish to follow the practice of election by a plurality of votes cast, an amendment to the articles is necessary.

Like the Business Code, this section permits cumulative voting on an "opt-in" basis. Unlike the Business Code, however, this section permits the use of cumulative voting if either the articles or bylaws so provide. Under the Business Code, cumulative voting must be elected in the articles. The Business Code prohibits cumulative voting unless either the meeting notice or proxy statement indicates that cumulative voting will be in effect or a shareholder notifies the corporation 48 hours in advance of an intent to cumulate the shareholder's votes. Under this Code section, the member need not give advance notice, but may merely give notice at the meeting of an intent to cumulate the member's votes, so long as the notice is given before the vote is taken.

Subsection (d) protects a minority that has elected a director from having that director removed by the majority. This subsection prohibits the removal of a director if those opposing the removal would be sufficient to elect the director by cumulative voting.

Subsection (e) is intended to prevent perpetuation in office of a director through the use of cumulative voting. If self-perpetuation is desired, it should be accomplished by some other means, such as by designation of directors. See section 14-3-804.

JUDICIAL DECISIONS

For purposes of interlocutory injunctive relief, the trial court properly found that the second of two factions controlled a nonprofit corporation. There was evidence that the corporation, a temple, had members, consisting of people who regularly attended the temple and participated in its events; furthermore, there was evidence that the members had been properly notified of an annual meeting and that more than 50 percent of the members appeared at the meeting and voted unanimously to elect the second faction to the board of directors. Nguyen v. Tran, 287 Ga. App. 888, 652 S.E.2d 881 (2007).

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